The party grew from student movements in the late 1980s in Java, Bali and Lombok established to protest against aspects of President Suharto's authoritarian New Order regime.

On 23 May 1994, a number of these groups and other activists declared the formation of the People's Democratic Association (also PRD), chaired by Sugeng Bahagijo.

A split the following year led to Sugeng's leaving the PRD to establish the Indonesian People's Democratic Movement (PADI).

[5] In an act of defiance, PRD presented awards to jailed East Timor opposition leader Xanana Gusmão and banned author Pramoedya Ananta Toer.

This sparked stone-throwing and large scale clashes between crowds of demonstrators and police and soldiers and ended with the largest riots in Jakarta for 12 years, with buildings and cars being burned.

Budiman was sentenced to 13 years in jail for subversion, but was freed in December 1999 after the fall of Suharto by President Abdurrahman Wahid.

This way, the state would manage these resources, but control would be in the hands of the people through independent organizations such as trade unions, with workers having a decision-making role in factories.